The Stock Market Rotates in Slow Motion; Low Volatility Continues

Our benchmark investment, the Fidelity Spartan 500 Index Fund (FUSEX, last change: 0.15%) was up slightly today and made a new 52-week high. 50% of Fidelity’s sector funds gained today following the index. The other half of the funds pulled back, but the daily moves were small.

The salient feature of the current market environment is its unusually low volatility. The lack of bad news from Europe, the Middle East and Washington combined with the money flow from bonds to stocks and the Fed’s stimulus package make the equity market appear less risky than in previous years. We know from market history that the low volatility will likely end soon, but for now we can all enjoy this uniquely peaceful market.

The sector rotation that often occurs in January has started, however the sectors move up and down at a slow pace. Top investments of 2012, such as biotechnology and international real estate, have retreated slightly (see charts below).

Investment areas with positive momentum include technology, energy services and blue chip stocks. The most out-of-favor sector remains gold mining stocks.

The Fidelity Select Biotechnology Fund (FBIOX, last change: -0.74%) has pulled back slightly from its recent high.

The Fidelity Select Biotechnology Fund (FBIOX, last change: -0.74%) has pulled back slightly from its recent high.

Fidelity International Real Estate Fund (FIREX, last change: -0.21%)

Fidelity International Real Estate Fund (FIREX, last change: -0.21%)

 

Fidelity Blue Chip Growth Fund (FBGRX, last change: 0.43%)

Fidelity Blue Chip Growth Fund (FBGRX, last change: 0.43%)

Fidelity Select Technology Fund (FSPTX, last change: 1.03%)

Fidelity Select Technology Fund (FSPTX, last change: 1.03%)

 

Buy/sell signals for Fidelity funds are available at FidelitySignal.com.  

 

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